FCX beat EPS estimates overnight, but the stock still slipped lower in line with a weak copper price after its stellar start to 2024. Interestingly, Scotiabank lowered their price target for FCX from $US55 to $US53; they must think it’s as good as it gets for this major copper miner, we believe they are too conservative.
- EPS of 32c trumped expectations of 27c while revenue of $US6.32bn was a more than 11% beat.
- Production guidance was raised by 1% in a sector that regularly suffers from operational downgrades.
The mining company said that copper production had lifted to 1.1Blbs from 965Mlbs – this market hasn’t turned metric yet! We remain very bullish towards the industrial metal, with this result cementing FCX as an excellent way to invest in Dr Copper. The main negative in the miner’s results was guidance that costs would come in higher than expected, which, combined with a poor 48 hours for the copper price, was enough to see the stock close lower, i.e. copper ETFs fell almost 2%.
- We remain bullish on FCX, in line with our core bullish view towards copper – MM is long FCX in our International Companies Portfolio.
- Our “best guess” is that FCX will trade between $US45 and $US55 over the coming months, suggesting it could present a solid buying1 opportunity in the coming weeks.
Some people are starting to question copper’s recent surge as Chinese buyers start to baulk at higher prices, but that’s what unfolds in markets driven by supply and demand. While regarded as a copper miner by most investors, it also produced 549koz of gold, not to be sniffed at with today’s prices! We are bullish toward both copper and gold in the medium term, which bodes well for FCX.
MM is bullish on FCX US through 2024/5
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